Madsen v Darmali (No 2)

The case of Madsen v Darmali (No 2) involved a plaintiff who was terminally ill and the defendants who were subject to an ex parte order. The plaintiff sought to have the ex parte orders set aside due to a lack of candour by the defendants and requested an expedited process given their condition. There was also evidence that the plaintiff had divested themselves of assets, prompting a reformulation of their claim. The court was tasked with deciding whether the defendants should be required to pay costs forthwith under rule 42.7 of the Uniform Civil Procedure Rules 2005 (NSW).

The court considered the discretion available to it under rule 42.7, focusing on the principles outlined in the case law. The motion at hand was deemed a discrete matter, and while there was some evidence of unreasonable conduct by the defendants, there was still considerable distance to cover in the litigation. Importantly, there was no evidence that a forthwith costs order would stymie the proceedings. The court also noted that the defendants should not bear the credit risk associated with the plaintiff's asset divestiture. Given the plaintiff's terminal illness and the likelihood of additional disruptions to the litigation, the court decided that the payment of the costs order should be finalised.

The court ruled that while there was some evidence of unreasonable conduct, it was not sufficient to warrant a forthwith costs order. The defendants were ordered to pay the costs of the proceedings, but the payment was not required forthwith. The court emphasised that the defendants should not bear the credit risk associated with the plaintiff's asset divestiture, and that the plaintiff's terminal illness warranted a finalisation of the payment of costs order.

The final orders included the setting aside of the ex parte orders for lack of candour, an expedited process due to the plaintiff's terminal illness, and the formulation of a new claim given the plaintiff's asset divestiture. The court also ordered the defendants to pay the costs of the proceedings, but without the requirement for immediate payment, taking into account the plaintiff's condition and the likelihood of additional disruptions.